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Nine to buy Fairfax in $4 billion takeover

Friday, 27 July 2018
By Jake Nelson
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Fairfax Media and Nine have announced a $4 billion deal which will see the formation of Australia’s largest media company, bringing together Fairfax’s print assets and Nine’s broadcast outlets.

Under the terms of the deal, announced on the ASX the morning of Thursday January 26, Nine will take over the 177-year-old media organisation, scrapping the Fairfax name and incorporating its existing assets including mastheads The Sydney Morning Herald and The Age into the combined company’s operations.

Fairfax CEO Greg Hywood.

In a note to staff, Fairfax CEO Greg Hywood said there would be “plenty of Fairfax DNA” in the new entity and its Board. “Over the last eight years, Fairfax Media has gone from being at the mercy of the non-stop global media revolution to being best of its breed, and that is why Nine wants to merge their business with ours,” he said. “At the end of this process, the business will be a media company of scale, depth of offering, and digital capacity and opportunities like no other in our region.”

If the deal goes through, shareholders of Nine will own 51.1 percent of the new company, to be called NEC (Nine Entertainment Company), with Fairfax shareholders comprising the other 48.9 percent. Nine’s Hugh Marks and Peter Costello will remain in their respective positions as CEO and Chairman. “Both Nine and Fairfax have played an important role in shaping the Australian media landscape over many years,” said Costello. “The combination of our businesses and our people best positions us to deliver new opportunities and innovations for our shareholders, staff and all Australians in the years ahead.”

Lorraine Cassin, AMWU.

The AMWU warns of potential job losses from the merger, which comes a week after Fairfax and News Corp announced a deal to share printing facilities, shuttering two Fairfax plants in NSW and Queensland. Lorraine Cassin, national print secretary at AMWU, said the union would work with management to ensure the industry would remain viable and continue delivering high-quality print journalism. “Just because the name of Fairfax is gone, it doesn’t mean that the important role of print journalism should go with it. Every job lost or the outsourcing of services by sending them offshore, means tighter deadlines and less time for quality control. This will inevitably result in a further reduction in the quality of journalism,” she said.

Journalists’ union MEAA (Media, Entertainment and Arts Alliance) has come out strongly against the deal, with Marcus Strom, president of MEAA Media, urging the ACCC to oppose it. “This takeover reduces media diversity. It threatens the editorial independence of great news rooms at Nine, the Sydney Morning Herald, The Age, Canberra Times, Illawarra Mercury, Newcastle Herald, Macquarie Media and more – right around the country. It harms the ability of an independent media to scrutinise and investigate the powerful, threatens the functioning of a healthy democracy, and undermines the quality journalism that our communities rely on for information,” he said.

The ACCC has confirmed it will look into the deal, with a spokesperson saying the consumer watchdog will evaluate whether competition in any market will be substantially lessened. “When reviewing mergers in the media sector, the ACCC considers the competition impact on consumers (both readers and viewers), advertisers and content creators/sellers,” the spokesperson said. “The impact of technology on the media sector will be a critical part of the competition analysis.”

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